ECB: COVID-19 is a “major shock” for global economy

President of the European Central Bank (ECB) Christine Lagarde said that there is a need for "large-scale and coordinated" measures in response to the coronavirus, warning that its spread has already become a "strong shock" for the prospects for global economic growth.

Tomaz Silva/ABr

“We urge governments and all other political institutions to take timely and targeted action,” Lagarde said during a press conference following the March meeting of the ECB. “Large-scale and coordinated fiscal policies are needed to support companies and employees at risk.”

On Thursday, the ECB kept the base interest rate on loans at zero, the deposit rate at minus 0.5%, the bank said. The margin lending rate was left at 0.25%. At the same time, the ECB will temporarily increase the asset repurchase program by €120 billion until the end of 2020, the Central Bank said in a statement.

During her speech, Lagarde also noted a significant deterioration in the prospects for the economy and "increased market volatility" due to the coronavirus.

On Wednesday, March 11, during a telephone conference with EU leaders, Head of the ECB warned that Europe would face a major economic shock comparable to the financial crisis of 2008 if EU countries did not take urgent measures in response to the spread of coronavirus. With the appropriate response, the economic shock is likely to be temporary, Lagarde admitted.